AMSTERDAM, March 17 (Reuters) - Michael Hasenstab, chief investment officer at Franklin Templeton Investments, said on Friday he had exited "almost all" European bond positions in funds he manages, citing ongoing political risk in Europe.

Hasenstab, speaking at a conference in Amsterdam, said European governments would continue to struggle with pressure from far-right candidates, including Marine Le Pen in France, despite the victory of a mainstream political party in the Dutch election on Wednesday.

"Just because one election has had a non-disruptive result doesn't mean we're through this," said Hasenstab, who runs Templeton's flagship Global Bond Fund, with $40 billion in assets.

He said he does not expect the European Union to break up soon but that he saw a possibility of that happening the next time the continent faces an economic downturn.

Separately, he said that stock and bond markets were underestimating the danger from central banks beginning to wind down expansionary monetary policies implemented in the wake of the 2008 financial crisis.

"Valuations are incredibly expensive in a lot of the core bond markets, colliding with inflationary trends that are increasing," he said.

"What we saw in October of last year, a rapid decline in bond yields hitting equities, we think is just a precursor of things to come."

He said his funds are investing in emerging market bonds, notably Mexico and Malaysia where he sees the currencies as undervalued.

Emerging markets are "not a safe haven, there is risk, but the difference is, at least you're getting paid for it," he said. (Reporting by Toby Sterling; editing by Jason Neely and Jane Merriman)